alt Hacker NewsWhy Almost Everyone Loses–Except a Few Sharks–On Prediction Markets
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Prediction markets are nothing more than gambling. Most people who gamble end up losing. If it were otherwise, running a gambling operation wouldn't be the enormously profitable endeavor that it is.
This whole prediction market space seems like a 2026 version of ball and cup game betting. Most of the people participating fail to understand that they (and their pointless bets up for harvesting) are the product here.
On a related note:
"Someone allegedly used a hairdryer to rig Polymarket weather bets" https://www.engadget.com/big-tech/someone-allegedly-used-a-h...
Alternative is archive.is
Text-only, no Javascript, no CAPTCHA, no DDoS on blog, no geo-blocking, HTTPS optional:
https://assets.msn.com/content/view/v2/Detail/en-in/AA22jnEi...
I ran the earliest predictions market online at the reboot of The Industry Standard.
Prediction markets fatally suffer from two Problems.
1) large sharks making huge bets at the end (destroying any signal from earlier bets)
2) inside information on poorly written bets.
The solution is parlay style payouts but that destroys popularity (you are paid out at closing odds not at your time of bet odds spread to sell position).
> On Kalshi, too, losers vastly outnumber winners. Spokeswoman Elisabeth Diana said there are 2.9 unprofitable users for each profitable one based on data from the past month
So 25% of users are profitable? That's vastly more than on financial sites - stocks/futures/forex/options trading where only 5% of bettors are profitable.
If by "sharks" you mean "inside traders" then yes.
People keep saying they provide the market with information, and that's the benefit of allowing the insider trading, but no one has pointed out how in any way society has benefitted from the insider trading instances so far...
> "John Pederson outside the homeless shelter in Detroit where he has been living since losing money on Kalshi...Pederson lost $41,000 on a mention-market bet related to hip-hop artist A$AP Rocky in January"
[dead]
I had a thesis two months ago that you could detect predictors with insider knowledge and ride their coat tails and spent some amount of time staring at the data and running some ML algos to detect them. I learned some things about the market during this time, but did not succeed in my detection algorithm.
* Polymarket is a bit more transparent with who placed what bet, so it's a good place to go to study winners.
* The most consistent Polymarket winner I saw was placing 95%+ odds many, many times a day.
* Most markets will have a surprisingly small liquidity, so if your edge is just 5% you won't make as much as a 5% edge in the stock market could make you. This is good in that it keeps the biggest fish out, but some big players seem to be using strategies based on holding the most chips.
* Paper trading in Polymarket/Kalshi is very different than paper trading in the stock market, because even a few grand in Polymarket/Kalshi can have a big impact in how other "traders" interact with you. The traditional paper trade validation -> unleash the bot strategy doesn't work. You need to real trade with real money and scale up while watching how the market responds.
EDIT: Bonus learning -- yes the market runs by getting fish into the system. That's why Kalshi is advertising so much, it attracts suckers for the professional to win from, all while Kalshi takes a percentage.